FINANCIAL FRAMEWORK (SUPPLEMENTARY POWERS) AMENDMENT (EMPLOYMENT, SKILLS, SMALL AND FAMILY BUSINESS MEASURES NO. 1) REGULATIONS 2019 (F2019L00935) EXPLANATORY STATEMENT

Details of the Financial Framework (Supplementary Powers) Amendment (Employment, Skills, Small and Family Business Measures No. 1) Regulations 2019

Section 1 - Name

This section provides that the title of the Regulations is the Financial Framework (Supplementary Powers) Amendment (Employment, Skills, Small and Family Business Measures No. 1) Regulations 2019.

Section 2 - Commencement

This section provides that the Regulations commence on the day after the instrument is registered on the Federal Register of Legislation.

Section 3 - Authority

This section provides that the Regulations are made under the Financial Framework (Supplementary Powers) Act 1997.

Section 4 - Schedules

This section provides that the Financial Framework (Supplementary Powers) Regulations 1997 are amended as set out in the Schedule to the Regulations.

Schedule 1 - Amendments

The items in Schedule 1 make amendments to establish legislative authority for government spending on the New Employment Services Trial (the Trial) which will be administered by the Department of Employment, Skills, Small and Family Business (the department).

The Trial will pilot a new employment services model (the Model), with legislative
authority to be established through a consequential amendment to table item 34, and
a new table item 349 in Part 4 of Schedule 1AB.

The Government announced the Trial on 20 March 2019.

Item 1 - Part 4 of Schedule 1AB (table item 34, column headed "Objective(s)")

This item makes a consequential amendment to table item 34 in Part 4 of Schedule 1AB to include the 'New Employment Services Trial' within the scope of the existing Work for the Dole program. The Trial will test how the Model integrates with other specialist services and complementary programs, and the amendment ensures that participants in the Trial can access the Work for the Dole program.

Table item 34 provides legislative authority for government spending on the existing Work for the Dole program, which is administered by the department. Work for the Dole is a longstanding program which was initially trialled in 1997 and has been operating continuously since 1998. It places job seekers in activities where they can gain skills and experience, as well as benefit the community. Eligible job seekers need to undertake a certain amount of Work for the Dole, or other activities, to remain eligible for their income support payment. Work for the Dole activities are hosted by not-for-profit organisations or government agencies, and jobactive Providers work with these host organisations to identify suitable activities.

Item 2 - In the appropriate position in Part 4 of Schedule 1AB (table)

New table item 349 provides legislative authority for government spending on activities to support the Trial.

The Trial will test key elements of the Model, and will commence on 1 July 2019 in the Mid North Coast in New South Wales and Adelaide South in South Australia. The Trial locations were chosen as they provide a cross section of job seekers to test the Model, including youth, mature age, Indigenous and culturally diverse job seekers, in both metropolitan and regional locations.

The Model was developed through an extensive consultative process, involving 1,400 stakeholders, over 450 responses to a public discussion paper, over 550 attendees across 23 public consultation forums and over 500 participants in user-centred design work. This involved engagement with job seekers, employers, Employment Services Providers (Providers), welfare groups and representative bodies for each of these groups. The Model was also informed by the recommendations of an independent expert advisory panel comprising employer, Provider and welfare groups' representatives, a labour market economist and an expert in business transformation.

Current arrangements with the jobactive network and complementary programs will continue in all other areas outside the Trial regions. Other complementary programs such as wage subsidies, Career Transition Assistance, Work for the Dole, the National Work Experience Program, Relocation Assistance to Take up a Job, Transition to Work, Youth Jobs PaTH and the New Enterprise Incentive Scheme will continue in the Trial regions.

The Trial will test key aspects of the Model. These include:

a new job seeker assessment framework
new Digital First, Digital Plus and Enhanced Services service offers
a flexible, points-based participation requirement system
new performance management and payment structures
how employers engage with the Model
improved Contact Centre support.

The department will continue to consult by establishing local working groups with stakeholders and community organisations, as well as a national reference group to test ideas and lessons from the Trial.

The Trial may be extended to other regions, and, depending on the results and following the Trial, the Model may be implemented nationally.

New job seeker assessment framework

New assessment processes are under development for testing and consultation during the Trial. These may include an improved Job Seeker Classification Instrument (JSCI). The JSCI is the questionnaire used to identify difficulties a job seeker may face in getting and keeping a job and identify the level of employment service support needed

Other processes to be trialled include digital literacy screening and checks on digital access, and better use of data to increase the accuracy of assessment. After a job seeker is referred to either Digital First, Digital Plus or Enhanced Services, it is intended that additional survey tools will ask about their strengths, skills and motivation, to help tailor the services they receive.

If a job seeker considers they have been referred to the wrong service, they can contact the department's Contact Centre to discuss their concerns. The Contact Centre will be able to arrange a reassessment to determine the right level of support for the job seeker. Reassessments may also occur if a job seeker's circumstances change, if they are not effectively meeting participation requirements, or at specific review points.

New Digital First, Digital Plus service and Enhanced Services service offers

Under the Trial, job-ready job seekers (the more job-ready part of Stream A, which includes job seekers assessed as being the most job-ready) who are capable of self-servicing online will enter Digital First, with access to a digital employment services platform that will include an online job board, job matching and online training modules.

Job-ready job seekers requiring some additional support (some from Stream A but primarily from Stream B) will enter Digital Plus, in which they will predominantly self-service online but will also receive face-to-face targeted support as needed. A variety of face-to-face support will be available to job seekers depending on their Provider's assessment of their individual needs. For example, a job seeker may be able to seek assistance with preparing job applications.

Job seekers with multiple or severe barriers to work who require face-to-face servicing from a Provider will enter Enhanced Services (Stream B and C job seekers, which includes job seekers assessed as having moderate to high barriers to employment). These job seekers will be placed in either one of two tiers, based on their needs:

Tier 1 - intensive help to improve job-readiness and finding a job, or
Tier 2 - comprehensive case management, addressing both vocational and non-vocational barriers.

Tier 1 will largely consist of Stream B job seekers, and Tier 2 will largely consist of
Stream C job seekers. However, Providers will have discretion and flexibility to decide which tier a job seeker is assigned.

Job-ready job seekers who are unable to use digital services, for example older job seekers who are job-ready but have insufficient digital literacy or job seekers without computer access, will also be able to access services delivered by a provider.

Flexible, points-based participation requirements system

Newstart Allowance, Youth Allowance (other than for full-time students and apprentices) and Parenting Payment under the social security law, also known as participation payments, involve participation requirements that recipients need to meet to remain eligible for their payment.

During the Trial a flexible participation framework will be phased in, which will give job seekers more choices about the activities they do to meet their participation requirements, for example, jobs seekers in Digital First and Digital Plus will be able to choose alternatives to applying for 20 jobs per month.

Under this approach, job seekers will need to obtain a certain number of "points". For example, 100 points each fortnight, by searching for work or improving their job-readiness. Job seekers will receive points for activities such as applying for a job; contacting an employer to ask about work; or for doing training, work experience or internships; or for volunteering. The more substantial the activity, the more points it will attract. For example, a detailed job application will attract more points than a phone call to an employer.

It will also be possible for a job seeker to "bank" points. For example, if they receive say 150 points in one fortnight by doing more than the required amount of activity then they would only need to achieve 50 points the following fortnight. This will provide more flexibility to job seekers.

Job seekers participating in digital services will have intensive activity requirements earlier than under current arrangements. For example, participants in Digital First and Digital Plus would be required to undertake an activity, which could include Employability Skills Training, Career Transition Assistance, or Exploring Being My Own Boss workshops after four months, instead of six months, of being in receipt of a participation payment.

After six months, job seekers would be required to diversify the activities they are undertaking. For example, they might need to reduce their amount of work experience and instead undertake training in interview preparation. The intention is that job seekers will not just persist with an approach that has not worked for six months.

After 12 months, Digital First and Digital Plus job seekers who have not progressed to employment, or are not actively building their job capacity through study or experience, would need to meet increased participation requirements. For example, their requirements would increase to a limited extent, but the overall nature of the requirements would remain the same. As is currently the case under the social security law, those requirements would need to be tailored to their circumstances, and not be beyond their capacity to participate.

Job seekers will be notified of their new requirements at each stage via a phone call, email or letter from the Contact Centre.

Performance management and payment structures

During the Trial, new performance management measures for Providers will be tested. These measures will promote high quality and tailored services that meet the needs of employers, and enable job seekers to prepare for and obtain sustainable employment.

A new payment structure for Providers will be tested during the Trial. Enhanced Services Providers will be delivering services to a smaller caseload, with incentives targeted at getting better outcomes for more disadvantaged job seekers. The department will continue to engage with Providers and stakeholders throughout the Trial to ensure that changed arrangements to processes such as payment claims do not cause disruption.

Employer engagement

Employers will be able to use the digital platform to advertise vacancies and access information about hiring staff and the local and national labour market - all at no cost. The digital platform will also have information about how to find a local service provider if an employer wants a face-to-face service. As the digital platform's functions increase, employers will be able to use tools to sort and filter applications and to find the best match for their business in less time.

Contact Centre

The Contact Centre will be delivered through the department's National Customer Service Line (NCSL). The Contact Centre will provide support via telephone or email to all job seekers using the digital employment services under the Trial, including assistance with using the digital service and advice on meeting participation requirements.

For job seekers in Digital Plus who require some additional support, the Contact Centre services may include:

referring job seekers to training
supporting the job seekers to use the digital services
work skills training
interpreter services
post-placement support
access to Employment Funding and wage subsidies.

The NCSL has the same decision-making powers as Providers under the social security law.

Timing

There will be a phased approach to the Trial's implementation. From July 2019, job seekers in Stream A will start using online services. From late 2019, Providers will start delivering the new Enhanced Services to Stream B and Steam C job seekers. The department will introduce different aspects of the Model, such as new approaches to assessment and activation, over the course of the Trial as they are ready for testing.

Funding of $176.8 million was provided in the 2019-20 Budget as part of the measure 'New Employment Services Model -- pilot and transitional arrangements' for a period of five years commencing in 2018-19. Details are set out in Budget 2019-20, Budget Measures, Budget Paper No.2 2019-20 at pages 149-50. Funding for this item will come from Program 1.1: Employment Services, which is part of Outcome 1. Details are set out in the Portfolio Budget Statements 2019-20, Budget Related Paper No. 1.13, Jobs and Small Business Portfolio (Jobs and Small Business) at pages 18-19, and 23.

Procurement decisions - limited tender

To engage Providers to deliver the services required under the Trial, the department is conducting a limited tender process in accordance with the Commonwealth Procurement Rules (CPRs), Clause 10.3.g, which allows a procurement of services to be conducted via limited tender if the services are "intended for limited trial". A limited tender process is the most appropriate approach given the services involve a trial for a limited period.

The limited tender process incorporates a Request for Expressions of Interest (REOI) with current jobactive Providers in the Trial regions. The REOI documentation includes selection criteria about the respondent's ability to work collaboratively with the department and other stakeholders (including other Providers), the respondent's ability to deliver the Trial, and the risks and constraints that may impact on its ability.

Following the REOI process, the department will negotiate a deed for the delivery of the Trial with successful Providers. The deed will require Providers to comply with guidelines, which may be amended from time to time to enable greater flexibility.

Information on this process, including outcomes, will be published on AusTender (www.tenders.gov.au). Final procurement decisions will be made by a Senior Executive Staff (SES) officer in the department.

Procurement decisions will be made in accordance with the Commonwealth's resource management framework, including the Public Governance, Performance and Accountability Act 2013 and the CPRs. The department will provide an opportunity for suppliers and tenderers to make inquiries and complaints should they wish to do so, and provide feedback to unsuccessful tenderers. These complaints and inquires can be made at any time during the procurement process, and will be handled in accordance with the probity processes for the procurement which will be made available on AusTender.

In accordance with usual practice, procurement decisions, once made, will be final and not subject to merits review. Re-making a procurement decision after entry into contractual arrangements with a successful proponent is legally complex, impractical, and would result in delays in the commencement of the additional Providers. The Government Procurement (Judicial Review) Act 2018 enables suppliers to challenge some procurement processes for alleged breaches of certain CPRs. This legislation might provide an additional avenue for redress (compensation or injunction) of dissatisfied Providers or potential Providers, depending on the circumstances.

Decisions by Providers and the contact centre under the social security law

All failures by a job seeker to meet participation requirements that lead to a determination to suspend payments, reduce payments or cancel a participation payment are subject to review on the merits and on questions of law, both within Services Australia and by appeal to the Administrative Appeals Tribunal. This includes any decisions by Providers or the Contact Centre about whether particular job seekers are meeting their participation requirements.

Decisions by Providers under the Trial outside the social security law

Providers will deliver services to job seekers participating in the Trial in consultation with the department's Contact Centre. In delivering the services, Providers may make decisions regarding the level and types of services provided and the stream that a job seeker is placed in.

As part of the Trial, Providers and the Contact Centre may refer job seekers to other services and programs offered by public or private entities. Examples of such services include counselling and drug and alcohol rehabilitation. Eligibility and/or acceptance in such programs is not a matter for the Providers and is reliant upon the relevant rules, guidelines, legislation or decision-making process for the relevant entity to whom the individual is referred. In other words, a "decision" by a Provider to refer or not refer a person to another service is of a preliminary or procedural nature. Non-referral would not mean the person could not access other services, or otherwise have a substantive impact on their interests.

The deeds with Providers will require Providers to have a process for dealing with complaints by job seekers, and to publicise that process to their clients. This will include a requirement to ensure that an appropriately senior member of their staff considers complaints, and to make clients aware of the option for them to complain to the Employment Services National Customer Service Line (visit http://www.employment.gov.au/contact-department for contact details). They must also actively assist the department investigate complaints made to that line.

Where the department receives a complaint about a Provider's decision it will acknowledge receipt of the request and contact the individual with a view to resolving any issues as soon as practicable. The department will review the issue and work with the individual and Provider to address it where needed. Where appropriate, the department will check whether the individual gives it permission to contact the Provider prior to doing so. The department will respond to the individual regarding the outcome of their request.

Commonwealth Ombudsman

A person dissatisfied with a provider or the department can raise the matter with the Commonwealth Ombudsman. The Ombudsman is independent of both the department and Providers. The Ombudsman has the power to ask the department to answer questions about the treatment of the person by a Provider or the department, or to provide records about the person's dealings with the Provider or department, or other relevant documents or information.

If the Ombudsman decides to investigate in response to a complaint, and makes any recommendations, the department could require the Provider to implement the recommendations. The department gives weight to the Ombudsman's recommendations and is required to respond to the Ombudsman as to what it has done in response to any recommendations. Failure to adequately respond could lead to adverse public reporting by the Ombudsman.

Noting that it is not a comprehensive statement of relevant constitutional considerations, the purpose of the item references the following powers of the Constitution:

the communications power (s 51(v))
the social welfare power (section 51(xxiiiA))
the territories power (s 122)

* the external affairs power (section 51(xxix)).

Communications power

The communications power in section 51(v) of the Constitution empowers the Parliament to make laws with respect to 'postal, telegraphic, telephonic and other like services'. The Trial will involve job seekers in the Digital First and Digital Plus accessing a digital employment services platform that will include an online job board, job matching and online training modules. Communications to job seekers will be sent by email and phone.

Social welfare power

The social welfare power in section 51(xxiiiA) of the Constitution empowers the Parliament to make laws with respect to the provision of certain social welfare benefits including unemployment benefits. The Trial benefits unemployed people by testing key aspects of the Model, including: a new digital platform to provide personalised support to all job seekers; greater support to the more disadvantaged job seekers (through Enhanced Services); improved assessment processes for determining the needs of job seekers; and a more flexible and self-directed approach to meeting participation requirements to help a job seeker into employment.

Territories power

Section 122 of the Constitution empowers the Parliament to 'make laws for the government of any territory'. The Trial may involve activities in or in relation to a Territory.

External affairs power

Section 51(xxix) of the Constitution empowers the Parliament to make laws with respect to 'external affairs'. The external affairs power supports legislation implementing Australia's obligations under international treaties to which it is a party.

The Trial, through testing the Model, gives effect to Australia's obligations under the following international conventions:

the International Labour Organization's Convention concerning the Organisation of the Employment Service (ILO Convention 88), particularly Articles 1 and 2;
the International Labour Organization's Convention concerning Employment Policy (ILO Convention 122), particularly Articles 1 and 2;
the International Labour Organization's Convention concerning Vocational
Guidance and Vocational Training in the Development of Human Resources (ILO Convention 142), particularly Articles 1, 2 and 4; and
the International Covenant on Economic, Social and Cultural Rights (ICESCR), particularly Articles 2 and 6(2).

Article 1 of ILO Convention 88 requires Members to maintain or ensure the maintenance of a free public employment service with the essential duty of the employment service to ensure, in co-operation where necessary with other public and private bodies concerned, the best possible organisation of the employment market as an integral part of the national programme for the achievement and maintenance of full employment and the development and use of productive resources.

Article 2 of ILO Convention 88 requires the employment service to consist of a national system of employment offices under the direction of a national authority.

Article 1 of the ILO Convention 122 provides that Members shall pursue 'an active policy designed to promote full, productive and freely chosen employment' that aims to ensure, among other things, that 'there is work for all who are available for and seeking work' and 'freedom of choice of employment'.

Article 2 of the ILO Convention 122 requires that the measures adopted for the purpose of Article 1 are kept 'under review within the framework of a co-ordinated economic and social policy' and that, where needed, programs be established to promote the objectives in Article 1.

The Trial is designed to promote full, productive and freely chosen employment. It will do this by testing key aspects of the Model including in the Trial Employment Regions, which will include communications to increase participants' awareness of opportunities and support to achieve employment.

Article 1(1) of ILO Convention 142 obliges each Member to 'adopt and develop comprehensive and co-ordinated policies and programmes of vocational guidance and vocational training, closely linked with employment, in particular through public employment services.' Article 1(2) requires the policies and programmes adopted for the purposes of article 1(1) to take due account of matters including 'employment needs, opportunities and problems, both regional and national' (article 1(2)(a)).

Article 2 of ILO Convention 142 obliges each Member to 'establish and develop open, flexible and complementary systems of general, technical and vocational education, educational and vocational guidance and vocational training, whether these activities take place within the system of formal education or outside it.'

Article 4 of ILO Convention 142 obliges each Member to 'gradually extend, adapt and harmonise its vocational training systems to meet the needs for vocational training throughout life of both young persons and adults in all sectors of the economy and branches of economic activity and at all levels of skill and responsibility'.

Article 2 of the ICESCR provides that State Parties undertake steps to achieve progressively the full realisation of the rights recognised in ICESCR without discrimination.

Article 6(2) of the ICESCR provides that State Parties recognise the right to work and will take appropriate steps to achieve the realisation of this right including through 'technical and vocational guidance and training programmes, policies and techniques'.

The Trial, through testing key aspects of the Model including a new digital platform to provide personalised support to all job seekers and more intensive support for the most disadvantaged job seekers, will assist in the realisation of the right to work.

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Financial Framework (Supplementary Powers) Amendment (Employment, Skills, Small and Family Business Measures No. 1) Regulations 2019

This disallowable legislative instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

Section 32B of the Financial Framework (Supplementary Powers) Act 1997 (the FF(SP) Act) authorises the Commonwealth to make, vary and administer arrangements and grants specified in the Financial Framework (Supplementary Powers) Regulations 1997 (the FF(SP) Regulations) and to make, vary and administer arrangements and grants for the purposes of programs specified in the FF(SP) Regulations. Schedule 1AA and Schedule 1AB to the FF(SP) Regulations specify the arrangements, grants and programs. The FF(SP) Act applies to Ministers and the accountable authorities of non-corporate Commonwealth entities, as defined under section 12 of the Public Governance, Performance and Accountability Act 2013.

The Financial Framework (Supplementary Powers) Amendment (Employment, Skills, Small and Family Business Measures No. 1) Regulations 2019 amend Schedule 1AB to the FF(SP) Regulations to establish legislative authority for the New Employment Services Trial
(the Trial), which will pilot key elements of a new employment services model (the Model). The Trial will be administered by the Department of Employment, Skills, Small and Family Business (the department).

This instrument amends Part 4 of Schedule 1AB by:

making a consequential amendment to existing table item 34 to remove the specific reference to the jobactive initiative under the existing Work for the Dole program to allow participants of the Trial to have access to this complementary program
adding new table item 349 to provide legislative authority for government spending on activities to support the Trial.

On 20 March 2019 the Government announced that the Trial will commence in the Mid North Coast in New South Wales and Adelaide South in South Australia. These regions were chosen as they provide a cross section of job seekers to test the Model, including youth, mature age, Indigenous and culturally diverse job seekers, in both metropolitan and regional locations.

The Model was developed through an extensive consultative process, involving around 1,400 stakeholders, over 450 responses to a public discussion paper, over 550 attendees across 23 public consultation forums and over 500 participants in user-centred design work.

This involved engagement with job seekers, employers, Employment Services Providers (Providers), welfare groups and representative bodies for each of these groups. The Model was also informed by the recommendations of an independent expert advisory panel comprising employer, Provider and welfare groups' representatives, a labour market economist and an expert in business transformation.

The Trial will test key aspects of the Model. These include:

a new job seeker assessment framework
new Digital First, Digital Plus and Enhanced Services service offers
a flexible, points-based participation requirement system
new performance management and payment structures
how employers engage with the Model
improved Contact Centre support.

The department will work closely with stakeholders and intends to establish local working groups with stakeholders and community organisations, as well as a national reference group to test ideas and learnings from the Trial.

The department will inform job seekers, stakeholders and the community about the Trial and how it is progressing. Information and updates will be added regularly to the website https://www.employment.gov.au/new-employment-services-model.

It is possible that the Trial will be extended to other regions. Also, following the Trial, depending on the results, the Model may be implemented nationally.

New job seeker assessment framework

New assessment processes are under development for testing and consultation during the Trial. These may include an improved Job Seeker Classification Instrument (JSCI). The JSCI is the primary questionnaire used to identify difficulties a job seeker may face in getting and keeping a job and identify the level of employment service support needed.

Reassessments may also occur if a job seeker's circumstances change, if they are not effectively meeting participation requirements, or at specific review points.

New Digital First, Digital Plus and Enhanced Services service offers

Job-ready job seekers requiring some additional support (the less job-ready part of Stream A) will enter Digital Plus, in which they will predominantly self-service online but will also receive face-to-face targeted support as needed. A variety of face-to-face support will be available to job seekers depending on their circumstances and needs. For example, assistance with preparing job applications.

Tier 1 - intensive help to improve job-readiness and finding a job, or
Tier 2 - comprehensive case management, addressing both vocational and non-vocational barriers.

Tier 1 will largely consist of Stream B job seekers and Tier 2 will largely consist of Stream C job seekers. However, Providers will have discretion and flexibility to decide to which tier a job seeker is assigned.

Job-ready job seekers who are unable to use digital services, for example older job seekers who are job-ready but have insufficient digital literacy or job seekers without computer access, are intended to be able to access services delivered by a Provider.

Flexible, points-based participation requirements system

Newstart Allowance, Youth Allowance (other than for full-time students and apprentices) and Parenting Payment under the social security law, also known as participation payments, involve participation requirements which recipients need to meet to remain eligible for their payment.

During the Trial, a flexible participation framework will be phased in, which will give job seekers more choices about the activities they do to meet their participation requirements, i.e. job seekers may be able to choose from a wider range of approved, employment-focussed activities.

Under this approach, job seekers will need to obtain a certain number of "points", for example 100 points, each fortnight by searching for work or improving their job-readiness. Job seekers could receive points for approved, employment-focussed activities such as applying for a job; contacting an employer to ask about work; or for doing training, work experience or internships; or for volunteering. The more substantial the activity, the more points it will attract. For example, a participating in a work experience placement could attract more points than a phone call to an employer.

After six months, job seekers would be required to diversify the activities they are undertaking, for example, they might need to reduce their amount of work experience and instead undertake training in interview preparation. The intention is that job seekers will not just persist with an approach that has not worked for six months.

After 12 months, Digital First and Digital Plus job seekers who have not progressed to employment or are not actively building their job capacity (through study or experience) would need to meet increased participation requirements, i.e. their requirements would increase to a limited extent but the overall nature of the requirements would remain the same. As is currently the case under the social security law, those requirements would need to be tailored to their circumstances and not be beyond their capacity to participate in.

Job seekers will be notified of their new requirements at each stage via a phone call, email or letter from the Contact Centre.

Performance management and payment structures

Employer engagement

Contact Centre

For job seekers in Digital Plus who require some additional support the Contact Centre services may include:

referring job seekers to training
supporting the job seekers to use the digital services
work skills training
interpreter services
post-placement support
access to the Employment Fund support and wage subsidies.

The NCSL has the same decision-making powers as Providers under the social security law.

Timing

There will be a phased approach to the Trial's implementation. From July 2019 Stream A job seekers will start using online services. From late 2019, Providers will start delivering the new Enhanced Services to Stream B and Steam C job seekers. The department will introduce different aspects of the Model over the course of the Trial as they are ready for testing.

Human rights implications

This Disallowable Legislative Instrument engages the following rights:

right to social security;
right to an adequate standard of living;
right to work; and
right to privacy.

Right to social security

Article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR) recognises the right of everyone to social security. The right to social security requires parties to establish a social security system and, within their maximum available resources, ensure access to a social security scheme that provides a minimum essential level of benefits to all individuals and families that will enable them to acquire at least essential health care, basic shelter and housing, water and sanitation, foodstuffs, and the most basic forms of education.

The right to social security is important in realising many of the other rights in the ICESCR, including the right to an adequate standard of living under Article 11.

Right to an adequate standard of living

Article 11 of the of the International Covenant on Economic, Social and Cultural Rights (ICESCR) recognises the right of everyone to an adequate standard of living and to the continuous improvement of living conditions.

Right to work

Article 2 of the ICESCR relevantly states that the States Parties undertake steps to achieve progressively the full realisation of the rights recognised in ICESCR.

Article 6(2) of the ICESCR provides that States Parties recognise the right to work and will take appropriate steps to achieve the realisation of this right including through 'technical and vocational guidance and training programmes, policies and techniques'.

Right to privacy

Article 17 of the International Covenant on Civil and Political Rights relevantly provides that no one shall be subjected to arbitrary or unlawful interference with their privacy and that everyone has the right to the protection of the law against such interference or attacks. The right to privacy encompasses respect for informational privacy, including the right to respect for private and confidential information, particularly the use and sharing of such information and the right to control dissemination of such information.

Right to social security

The need for the Trial

While the Government's current employment service, jobactive, has been successful in placing over one million people into work and the current labour market is strong, there is a need to trial new arrangements to minimise the number of long-term unemployed people. For example, nearly two-thirds of job seekers have been in the system for at least one year and one in five job seekers have been in the system for more than five years.

A trial of new arrangements is also needed to respond to technological and other changes affecting the economy and the nature of work - for example the widespread use of internet platforms that allow employers to connect with workers directly and vice versa, the increased availability of part-time work and increased incidence of post-school qualifications.

The purpose of the Trial

The purpose of the Trial is to test the Model, which aims to get more people into jobs, which they will keep, faster, so that more people can experience the greater economic and social inclusion that results from employment. The Trial will test, re-test, and evaluate ways of making better use of resources and providing more help to the most needy. On average, staff at Providers have 148 job seekers on their caseload. Savings from smaller Provider caseloads due to digital self-servicing will be redirected to help and invest in job seekers most in need.

The Trial is based on extensive stakeholder consultation

The Model was developed through extensive consultation with stakeholders. The Government appointed an independent Expert Advisory Panel in January 2018 to help shape the future design of employment services in Australia. The Employment Services Expert Advisory Panel's report I Want to Work: Employment Services 2020 was provided to the Government on 15 October 2018.

A summary of stakeholder feedback is available in The Nous Group Report, Employment Services 2020: Consultation report. A summary of responses to the public discussion paper is also available and can be found in The Social Research Centre Report, The Next Generation of Employment Services: summary of consultation responses.

There was strong stakeholder support for more intensive and tailored support for the most disadvantaged job seekers, focussing on the needs of the job seeker, improving the assessment of job seekers, and for online services for job seekers who can self-service, freeing up resources for those who need enhanced services.

Existing safeguards will remain in place

Under the current social security law, safeguards are in place to ensure that no job seeker will have reduced access to a social security payment without good reason.

For example, failures by job seekers to meet their participation requirements will not result in a payment reduction or cancellation if the job seeker has a reasonable excuse for failing to comply. Examples of a reasonable excuse include illness, unforeseen caring responsibilities, or lack of literacy or language skills,

The Trial will not affect those safeguards. The new system maintains a safety net for all job seekers to ensure that at all times, their participation requirements match their capacity. Job seekers will only move towards potential financial penalties after their capacity has been assessed at least twice, giving them an opportunity to explain why they cannot meet their requirements.

It will also remain the case that job seekers will not be required to look for, or undertake, work for which they are unsuited. For example, work will be unsuitable for a person if they lack the skills to do it and no training will be provided by the employer, the work would aggravate a medical condition of the person, or the work is unsafe.

In addition, all failures to meet participation requirements that lead to suspension, reduction or cancellation of a payment will continue to be subject to review both within Services Australia and by appeal to the Administrative Appeals Tribunal. This is another important safeguard.

Promotion of the right to social security

The Trial will help maintain the sustainability of the social security system so that a safety net can continue to be provided to those in need.

Under the Trial, applying for jobs will remain a core requirement for most job seekers. However, there will be a greater focus on the quality, not quantity, of job applications to recognise the effort required to tailor applications. This will encourage job seekers to apply for jobs for which they are most suited and reduce the number of jobs for which they need to apply to maintain eligibility for their payment.

Job seekers will be assessed to determine both their digital skills, and their digital access. If they wish to use the digital system, but are not good with computers or smartphones, they will be provided with digital training.

If they do not otherwise have internet or computer access, they will be able to access
face-to-face services.

The Trial will enable job seekers to have greater flexibility, choice and control, not only about how they engage with the system but also in relation to their participation
requirements - for example they will be able to have more input into the content of their
job plan.

Job seekers will be able to meet requirements through a choice of activities such as job search and training, with more points for higher quality or more intensive activities. They will also receive increased guidance on how to meet their participation requirements via the Contact Centre.

The new points-based approach will allow more self-direction to meet participation requirements and will make it easier for job seekers to comply with and report on their compliance with their requirements.

Any increase to participation requirements will be limited both in extent and duration, and subject to review

Compared to the current jobactive system, job seekers will be required to undertake more intensive activities, such as training, and to do so earlier. There is a pressing need to trial such an approach because of the number of job seekers currently remaining in the system for significant periods and due to the negative economic, social and health impacts which
long-term unemployment can have on job seekers.

Earlier intensive activity will give job seekers greater personal responsibility and encourage job seekers to choose their own employment pathway.

The more intensive requirements after four months of being in receipt of a payment may include participating in a short course of up to approximately two or three weeks duration concerning job search skills, general employability skills, or a course which improves a job seeker's prospects of obtaining work in a particular industry. Such requirements might also include voluntary work for a short period, for example.

The nature of the more intense requirements will depend on the job seeker's individual circumstances and needs and will not exceed their capacity. It will also depend on discussion with individual job seekers, factors relevant to the local labour market, and the extent to which any new options become available during the course of the Trial. The Trial will continually involve evaluating and learning about what works, and adapting to changes in local labour markets, as it proceeds.

Not all job seekers will have more intense compulsory activities after four months. For example job seekers who are declaring enough earnings to reduce their payment to a part rate, and early school leavers undertaking a certain amount of education, will not be required to participate in extra intensive activity. There will likely be other cohorts who are also not required to participate in more intensive activities after four months, which will be ultimately determined during the course of the Trial.

After six months of being in receipt of a payment job seekers will be required to diversify - not increase - their activities. Again, this would be tailored to individual circumstances. For example, if a job seeker had been successful in identifying suitable jobs and obtaining interviews but had not yet secured employment, the possibility of doing training to improve their interview performance might be raised with them. If they undertook such training their other requirements would reduce proportionately.

Some, but not all, job seekers will be required to increase their requirements after 12 months. For example, job seekers who have consistently been significantly exceeding their requirements or undertaking appropriate intensive activities will not be required to participate in increased activities. This provides an incentive for job seekers to exceed their requirements in the earlier stages of receiving their payment, if they are able to do so. Requirements after 12 months would continue to reflect individual circumstances, needs, capacity and input from the job seeker.

The increased participation requirements for some job seekers during some periods will boost their prospects of finding work and will not prevent job seekers in need of income support from continuing to receive it at the same level.

Right to an adequate standard of living

The Trial will promote the right to an adequate standard of living. It will promote the right to work and therefore promote greater economic and social inclusion that follows from employment. The Trial will also make it easier and cheaper for job seekers to maintain eligibility for their participation payment, for example by spending less time and money on travel to face-to-face appointments with Providers. The limited increase to participation requirements will not prevent job seekers in need of income support from continuing to receive it at the same level.

Right to work

The Trial will promote the right to work and encourage job seekers to engage with their right to work. It will enable the most job-ready job seekers to self-service online. This will mean that staff at employment service Providers will be freed up to spend more time with job seekers who need the most help. Providers will be more able to address their barriers to work through services such as career guidance, mentoring, vocational training, assistance in accessing non-vocational services such as counselling, work experience, job placements and post-placement support.

The online self-servicing will also mean that Providers have more opportunity to develop relationships with employers, become expert in local labour market needs, and better connect with other support services and each other.

The Trial will include improved, more holistic processes for assessing job seekers needs, strengths, skills and goals, not just barriers to employment. Job seekers will also be assessed over time and when their circumstances change. This will enable the creation of customised tools and interventions and more tailored pathways to employment.

Existing complementary programs, such as wage subsidies, Career Transitions Assistance and the New Enterprise Incentive Scheme will continue as part of the Trial.

The new digital arrangements will make it easier for job seekers to search for jobs and connect with employers. More comprehensive online tools will help retrenched workers and other job seekers to identify occupations and career paths that make the most of their skills and experience. All job seekers can receive guidance via the Contact Centre during the Trial.

The Trial will support proactive employer engagement to improve job seeker access to suitable employment opportunities. The Trial will also include higher up-front payment to Providers to enable greater up-front investment in job seekers, easy to use funding to purchase items and services job seekers need to search for and stay in work, and better communications to increase job seekers' awareness of opportunities and support for achieving employment.

Right to privacy

The department and Services Australia are required to comply with privacy law and with provisions in the social security law relating to protected information. Provisions in the department's deeds with Providers compel them and their subcontractors, if any, to comply with such laws or be subject to action under their deed.

As part of its compliance with such laws the department will continue to ensure that job seekers are provided with privacy notices which outline how their personal or confidential information may be used or disclosed and the purposes for which it is collected. Such notices may be updated from time to time during the Trial.

The department will also continue to provide job seekers and employers with guidance on how to protect their privacy when undertaking online activity. The department will also conduct any appropriate privacy assessment.

Conclusion

The Disallowable Legislative Instrument is compatible with human rights because it generally advances human rights. To the extent, if any, that it may limit human rights, those limitations are reasonable, necessary and proportionate.

Senator the Hon Mathias Cormann

Minister for Finance

Commonwealth Numbered Regulations - Explanatory Statements